Relevant and even prescient commentary on news, politics and the economy.

Hey Rustbelt and beyond, Losing factories is not new

(There’s a movie at the end!)

For decades we have been hearing about the loss of industrial production through out what is called the “Rust Belt”.  It’s presented, even as recent as the prior presidential election as a relative regional problem that only began post Reagan.  What gets me though is that the reporting and ultimately the politics are as if the rust belt is/was unique in their experience with the west and east coast experiencing nothing of the sort.  The presentation is of the west coast Hollywood economy and now the “tech” economy, the east coast (namely New York/Boston) being the money economy.  The south east is not considered other than Disney and orange production.  The north west?  Microsoft and Starbucks.  Well I think it used to be lumber.

Wiki notes that the rust belt is not geographic but is a term that “pertains to a set of economic and social conditions“.     It includes the northeast which is proper in that industry started there but I have had the feeling for a few decades now that such history is forgotten and thus no longer considered when we look to understand what the hell happened to the middle class.

Let me start with this fun fact.  Rhode Island was the most industrialized state per capita in the nation at one point.  Wiki notes that:

…Aldrich, as US Senator, became known as the “General Manager of the United States,” for his ability to set high tariffs to protect Rhode Island — and American — goods from foreign competition.

We were where the super rich came to escape the heat and play.  And then it started to die.  Not just here though.  Neighboring Massachusetts was hit as was Connecticut.  If you ever get a chance, come visit the New Bedford  Whaling museum and read about the massive industry that was there.  Example, the worlds largest mill of weaving looms.  Some 4000+!  Whaling from that city in the later 1800’s generated some $71 million per year!  Not impressed? Well, using the GDP deflator it’s $1.480 billion per year!

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Ruminations On Virginia’s Difficult Situation

Ruminations On Virginia’s Difficult Situation

A week ago, I posted here supporting VA Gov Ralph Northam, comparing him favorably to the late Robert C. Byrd of WV. A day later I joined the call for him to resign after his bizarre press conference that has still left unpleasant unresolved issues such as who put that awful photo in his yearbook and why. Since then much else has come forth, and this continues. In any case it looks like Northam may hang in for at least awhile, although the situation is complicated and constantly changing, to put it mildly. What I intend to add in this post beyond the latest news is a combination of inside local information as well as, hopefully, a deeper historical perspective.

Last morning’s (Friday, 2/8), Washington Post top headline was that Northam would not resign soon, and late this afternoon I as an employee of the Commonwealth of VA received an email message saying he hoped we would all support him continuing to lead the state, while carefully not being too out there too much on that he would stay in office for his full term.

One reason why he was not going to resign immediately, even without the recent collapse of his most immediate successors, is that until Feb. 23 the VA legislature is debating a serious budget issue. The Trump tax law has resulted in a revenue windfall for Virginia. This involves technical details I know but will not bore any readers with this. So, there is an ongoing debate in the VA legislature on what to do with this extra money, with the barely majority GOP in the legislature saying give it all to upper middle-income persons, while Northam and the Dems have proposed giving half of it to lower income people while using the other half to fund various state initiatives. If this current scandal had not appeared, I think Northam would have gotten an agreement not too far from what he wanted. Now in his weakened state, the ultimate compromise will be closer to the GOP version.

For any not following the news since a week ago, both of Northam’s immediate successors have themselves come under unpleasant scrutiny. Lt. Gov. Justin Fairfax has now been seriously accused of two sexual assaults. When accused of the first he denied it and hired an attorney. The second accusation coming a few hours ago is of rape, and while earlier many were supporting him to replace Northam, this now seems to have become unlikely. I note that I never liked Fairfax. I know all these people personally, and the African American I would like to see as governor is Levar Stoney, currently Mayor of Richmond and a grad of JMU where I teach.

And now the second in line to the governorship of VA, assuming that both Northam and Fairfax resign (neither of which at this point has so far remotely come close to doing so), is Attorney General Mark Herring, now in his second term, having stepped aside from running for Lt Gov to let the now seriously damaged J. Fairfax run for that. Last Thursday AG Herring revealed that he also had performed in blackface in 1980 at UVa at age 19.

If Northam, Fairfax, and Herring all resign or forced out of office, then the acting governor will be the Speaker of the House, Kirk Cox, not only a Republican, but one how just gave an impassioned anti-abortion speech full of ridiculously irrelevant Biblical passages, given that there is nothing in the Bible that directly forbids abortion.

As it is, it appears that all of this blew up because Northam is a pediatric neurologist, who only recently became a politician. So when Dems in the VA legislature attempted to loosen rules on late abortions, Dr. Northam got into rare and weird cases I was not aware of involving treatment of deformed fetuses and whether one born should be “revived.” Personally, I do not know how to deal with such extremely rare cases, although basically siding with mothers and their physicians. But Republicans cherry picking this overly specific discussion by Dr. Northam turned it into “infanticide,” with Trump making this charge in his SOTU.

More immediately and seriously the rumor I have heard is that what triggered the revelation of that embarrassing photo in Northam’s yearbook came as a result of his professional testimony about this odd and rare case, which his opponents seized on, blocking any expansion of abortion rights in VA and providing fodder for Trump’s ranting in his SOTU about “infanticide,” a false charge.
But back in VA, reportedly a roommate from med school of Northam got ticked off by this medical testimony by Northam, and then leaked the story to whatever media about the yearbook photos. This set off the call that he should resign, leading us to the now unacceptable (although I read, he has hired lawyers, puke), and then the now damaged AG Herring. While so far Speaker Cox is “clean,” aside from being a far-right winger, the GOP majority leader of the state senate, Norman Tennant, has been accused of a half century ago being an editor of a yearbook containing racist photos.

I have lived in VA for 42 years and have deep south ancestry including VA. But this matter has made me realize that for all my deep family background going back to the 1600s in VA, I was and am a “damned yankee” to all those born and raised here. My parents were born and raised in Deep South northern Florida, and when young I spent serious time there. This made me think I knew the South, but I now know that ultimately I was an outsider, especially given that I went not only to high school in liberal/progressive Madison, Wisconsin, where the state capitol building has a museum for the Grand Army of the Republic, the ultimate hard core of the northern Union that won the Civil War (“War of Northern Aggression according to a cousin of my father that my wife from USSR/Russia met in 1987).

So, a big revelation to me in the last week is how widespread this “blackfacing” and related racist manifestations were even into recent times. The yearbook where Northam’s photo appeared (Eastern Medical School of Virginia) had racist photos as recently as 2013, when the then dean just shut down the yearbooks. I have never seen a black faced performance, but now old very liberal and local friends have been surfacing with old past incidents of racist conduct. This sort of resembles post-WW II France, where many collaborated with the Nazi Vichy regime, but then later joined the anti-Nazi Resistance. Eventually this became a matter of when one turned from one side to the other, and good liberal close friends have been essentially playing postwar French fessing up to just exactly when they stopped using the “n-word,” much less blackfacing.

The deeper history of all this is in Virginia 400 hundred years ago in 1619 when on the one hand the oldest continuing English-speaking legislative body in North America was founded, the same one (with some modifications over the centuries), that I noted above is trying to resolve the Trump tax “reform” with VA tax law. The other is the first arrival in what is now the USA of African slaves. Needless to say, this latter matter is on many minds and relevant to this current controversy.

To make things even worse, it was in Virginia in 1705 that the crucial laws were passed fully establishing that slavery was to be of people of African descent and that those people could not marry anyone of European descent. So since then in 1860 the state had more slaves than any other, its capitol became the that of the Confederate States of America, with half the battles of the succeeding Civil War (or “War of Northern Aggression” according to some of my cousins of earlier generations), and then its state capital became the capital of the Confederacy. This led to half the battles of the Civil War being fought in Virginia.

More recently we had the Byrd Machine supporting resistance against racial integration of public schools after Brown vs Board of Education in 1954. Eventually this was all over come. But in the private places, including many frats on many campuses until very recently, racist practices such as “blackfacing” persisted. And although the worst violence came from outsiders, in Charlottesville in August, 2017, we saw overt racist violence in Virginia.

Eventually this has become personal. With all these revelations, very liberal friends of mine have now outed themselves as having been varying degrees of racist in the past. I now realize that while I have deep southern ancestry including high officers in the Confederate army, I was born and raised in the North. I did not see all this stuff, and I did not personally have to go through this process of personally ‘deracializing’ myself, which I now realize my deep southern parents went through, my father moving from deep south racist Democratic Party affiliation when he went to math grad school in Princeton in the 30s to being a Republican, When he took us in 1963 to uber-progressive Madison, Wisconsin, well, no wonder I did not do blackface.

A final bottom line is that Gov. Northam’s still unresolved yearbook photo has the absurd idea of possibility of a racial reconciliation to all this. I do not know why he continues to claim no knowledge of the origin or handling of this old photo of black faced white person standing next to someone wearing a KKK hooded outfit that is in his medical school yearbook. But while whatever relation it had to Gov. Northam personally, it could be interpreted in its superficial stupidity as also showing a possible racial reconciliation for the long and troubled racial history of Virginia. This now shocking photo shows a black faced man standing peacefully next to somebody wearing a KKK outfit. While indeed the obvious interpretation of those photo supports racism, another interpretation is of harmony among the races, even including the old southern racists of the KKK.

Observing old Virginia friends of mine now confessing their past racist behavior and views, it seems that for them this looks sort of like the post-WW II French. After the war they were supposedly all anti-Nazi and supporters of the anti-Nazi Resistance. But, of course, many did work for the pro-Nazi Vichy regime after the German conquest of France in 1940. But then, as the Allies increased their obviously ultimate victory over that regime, more and more former collaborators with the Vichy regime would quit and join the Resistance. Eventually this game became a matter of timing one’s switch from working for a ruling Vichy to an anti-Vichy/Nazi Resistance.

Several of my good friends now confessing their past racist conduct have put it in these terms: it has become a matter of timing, just when did one finally stop doing these bad old behaviors? Reportedly Ralph Northam only learned two years ago that “blackfacing” was not socially acceptable. Whatever comes out of the current crisis in Virginia, hopefully in the future we shall have better informed and more deeply understanding leaders in Virginia and more broadly.

Addendum: 2:30 PM, 2/9/19: The VA legislature has reportedly come to an agreement on its budget dispute. Apparently, the agreement tilts strongly towards what the GOP members favored due to the weakness of the Dems arising from these scandals involving their elected leaders in the state. Not surprising.

Barkley Rosser

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“I’m not sure I follow the arithmetic here.”

“I’m not sure I follow the arithmetic here.”

“Unless productivity goes up by at least 25% to compensate, everyone will be worse off.”

“Dropping hours from 5 days a week to 4 means that the work that would have been done in 5 days now needs to be done in 4, which means each day needs a 25% increase in productivity. Where on earth do you think such an increase is going to come from?”

“OK, but to arrive at the same output in 4 days rather than 5 means that people have to become 25% more productive than they are today. That’s an awfully big jump in productivity. I’m not convinced that people today are that unproductive. Certainly when I think of my past workplaces, I don’t think my colleagues were that sub-optimal. A 10% increase in productivity seems more reasonable.”

Following up on yesterday’s post about comments in the Guardian, here are some thoughts about “where on earth” a productivity increase of 25 percent might come from:

Let’s start from a 40-hour week in which the rate of output declines somewhat toward the end of the day when workers are beginning to tire. Let\s assume the least productive eight hours of work produce only 75 percent of the output of the most productive 32 hours of work. Call the average output of the most productive 32 hours “one unit” of output. Total output for 40 hours work is 38 units.

Now, reduce the weekly hours to 32. Better rested, more motivated workers result in a “reasonable” 6.25 percent increase in average hourly productivity above and beyond the productivity gain from eliminating the least productive hours. Total output in 32 hours is now 34 units compared with 38 units previously produced in 40 hours.

 

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Sunday News

Texas AG Claims Noncitizens Voted in 2018, Liam Stack, NYT

Texas AG Ken Paxton: “Every single instance of illegal voting threatens democracy in our state and deprives individual Texans of their voice.” Texas has called into question 95,000 registered voters who in the past have identified themselves as noncitizen and legal residents of the United States.

Other authorities are skeptical of the AG’s claim 58,000 noncitizens of the 8.2 million registered voters listed voted in 2018. A spokesman for the AG followed up stating the identification of the 95,000 is not proof of voting. Texas is asking each of the identified for additional proof of citizenship. Texas has one of the strictest voting laws in the nation. Nonvoting citizens is a felony, oops a mistake, noncitizens voting in Texas is a felony and noncitizens registering is a misdemeanor.

Civil Rights Attorney Kristen Clarke: “Texas has a rich history of undertaking action to make it harder for people to vote,” she said. “Whenever you’re invoking the threat of criminal prosecution, the chilling effect becomes almost unavoidable.”

From Celebrated to Vilified Sheryl Gay Stolberg, NYT

As symbols of diversity when they were sworn in last month, Congressional Representatives Rashida Tlaib of Michigan and Ilhan Omar of Minnesota joined the other 435 members of the House of Representatives.

One month later and after bringing their views on Israel to the forefront, they have found themselves to be the most vilified of the Democrats by their own party and that of Republicans. The president of the J Street a liberal Jewish advocacy Ben Ami said the two are “opening up a discussion that is absolutely needed on American policy.” They are helping to pull the Democratic Party more toward the view espoused by J Street and “younger liberal Jews” who believe that “you can be sympathetic to the state of Israel and also sympathetic to the plight of the Palestinian people.”

Both women are under fire for their views and comments.

the smirking face of Trumpism in America Rafia Zakaria, The Bafler

This comes a bit late. I was off visiting family in Chicago and helping my wife keep two young, challenging grand daughters busy while temperatures plummeted in the minus twenties at night and the winds off the lake did not make the minus teens any better during daylight. I can not recall in my 60 plus years temperatures of this kind even living further north. And neither can I recall the outward arrogance of teens on display at the Lincoln Memorial.

As Rafia writes; “Just as many seemed to be coalescing against the shamefulness of young men deriding a Native American veteran, another story, the cherished ‘other’ side with which the pain of non-white Americans is trivialized, was gathered up. Solemn faced television anchors and their off-air Twitter colleagues now dished up ‘context.’ Whether or not it was intended for this purpose, its effect was to muddle up the story that the original video told, a story whose racist truth cast in the arrogance of a young man and the fortitude of an old one had galvanized an America of ever-dwindling empathy to actually care.”

What other side of this can there be? A teenage white-boy standing in front of a native American veteran with a smirk on his face wearing a red “MAGA” cap to a protest designed to protect the unborn. The Catholic church caves to the white parents of the white students. There was a moment when this could have gone the other way. The young teen could have left his red cap at home, could have stepped out of the way, could have watched with respect of another culture practicing a religion unknown to most of us, etc.

There was a defining moment and the young man in question showed one example of it, an image of American intolerance of minorities in a mostly white American. There is no other side to this story. It is strictly what can be observed.

I have been asked to talk about my global travels at a Jesuit University from where I earned my Masters. There is a great example here of how not to be an Ugly American. There is another side also and it is “how to behave as a minority” in another country.

Millions of College Students Go Hungry While Pursuing a Degree, Marcella Bombardieri, The Atlantic

From a 2017 survey, 42 percent of community-college students nationally experienced food insecurity within a previous month. This could mean missing meals altogether or not being able to afford balanced meals. Twelve percent of students were considered homeless at some point in the previous year.

Among Amarillo College students who took the same survey, 54 percent had experienced food insecurity within the past month, and 11 percent had been homeless in the past year. The Amarillo student body is not significantly needier than those of other institutions, but the college leadership’s interest in highlighting the extent of the need is much more unusual.

Amongst college students food insecurity is a real issue. A new report from the Government Accountability Office highlights the breadth of those students affected. Three common risk factors for food insecurity were identified among low-income students; being a first generation college student; receiving SNAP (receiving SNAP can be considered a risk factor in that it may reduce and not entirely eliminate food insecurity); and being a single parent. Of the approximately 7.3 million low-income students, 31 percent were first-generation college students, 31 percent reported receiving SNAP, and 25 percent were single parents.

‘Show of force’, Anna Giaritelli, Washington Examiner

In a show of force, the Trump administration has flooded a Texas border town sitting just over the river from the Mexican city of Piedras Negras. 1,800 caravan migrants arrived earlier in the week as well as hundreds of law enforcement personnel across the river. Both sides of the river have been watching this caravan move. And of course every news media glorifying Trump’s actions is out carrying the “you will not pass this way” message. “To me, it is showing force. It would give a message to the immigrants wanting to come illegally through Texas that it is always prepared and has a lot of manpower at the border — that they should go to another state,” County Sheriff Tom Schmerber.

“100 U.S. law enforcement vehicles lined a one-mile stretch of the Rio Grande River in Eagle Pass, Texas on a Saturday afternoon. Sixty sat together in one section of the river on a local golf course.”

I wonder what the fairways look like now? I am sure the golf course and the resident golfers were thrilled. And they will blame the supposedly wretched illegals for trying to escape a condition the US helped to create.

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The 1912 Bread and Roses Strike

The 1912 Bread and Roses Strike

Elizabeth Warren made an impressive speech just now in the freezing cold of Lawrence, Massachusetts:

Sen. Elizabeth Warren officially launched her 2020 presidential campaign Saturday at a rally in Lawrence, Massachusetts, using the backdrop of Everett Mills — the site of a historic 1912 labor strike led by women and immigrants — to issue a call to action against wealthy power brokers who “have been waging class warfare against hardworking people for decades.” Over 44 minutes in sub-freezing temperatures, Warren described a political elite “bought off” and “bullied” by corporate giants, and a middle class squeezed so tight it “can barely breathe.” “The man in the White House is not the cause of what is broken, he is just the latest and most extreme symptom of what’s gone wrong in America,” Warren said of President Donald Trump. “A product of a rigged system that props up the rich and powerful and kicks dirt on everyone else. So once he’s gone, we can’t pretend that none of this ever happened.”

Warren has staked herself as the true progressive in terms of those who have already announced. I’m sure many others will comment on the specifics of her speech so let me note this 1912 strike:

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Will INSTEX Replace SWIFT Bank Exchange?

Will INSTEX Replace SWIFT Bank Exchange?

Probably not, but reportedly a “White House insider” is afraid it might.

Instex is the new exchange created by UK, France, and Germany, to be based i Paris and run by a German banker, to get around US sanctions against Iran.  Apparently it will sell Iran humaanitarian goods such as pharmacueticaals and food not subject to the sanctions, with those being paid for with Iranian petroleum that will then get sold elsewhere, none of this involving any US dollars.  It is probably too small to threaten the dominance of the international SWIFT bank exchange system, but this does open up the possibility for nations to avoid US limits on their international financial transactions, with the US having used the SWIFT system in the past to crack down on unfavored nations.

Addendum:

There is a long, front page story in the Washington Post this morning about this matter Griff White and Erin Cunningham. For starters, I can relay that “Instex,” which should probably be INSTEX, stands for “Instrument in Support of Trade Exchanges.”  Second is that the Trump’c campaign to get European, and especially German, companies to obey the anti-Iran US sanctions has beeen very agrressive and largly run out of the US Embassy in Berlin, with US Ambassador ro Germany, Richard Grenell, the point man on this.  He had received press attention and criticism by some German business people when he arrived in Berlin last May and publicly called for German businesses to withdraw from Iran.  That criticism did not slow him down one bit, and his efforts have led to some major German companies to withdraw, notably Siemans, VW, and Daimler-Benz, all of which have large-scale operations in the US.

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February short leading data starts out decent

February short leading data starts out decent

We’ve had two pieces of forward looking data in the last week (in addition to the leading bits in the employment report).

The first was the ISM manufacturing index:

Contrary to my expectations, the most leading new orders component rebounded sharply, up to 58.2. This is closer to its “hot” readings of mid-2018 than to its tepid 51.3 in December.

 

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“Just doesn’t add up'”

“Just doesn’t add up'”

  • “I’m not sure I follow the arithmetic here.”
  • “It’s all down to the numbers – something the article avoids and so is just pie-in-the-sky.”
  • “That clearly does not add up.”
  • “If you produce X in 30 hours you will produce > X in 40 – unless you are just sitting on your arse for the extra 10 hours.”
  • “If you work 40 hours your total output will be higher than if you work 30 hours – unless you are actually destroying output in those extra 10 hours.”
The U.K. think tank Autonomy has published a report on working time, “The Shorter Working Week: A Radical And Pragmatic Proposal.” Autonomy’s co-director, Will Stronge, wrote an Op-Ed for the Guardian on Friday that outlines some of the proposal’s main points. The Guardian piece received over 600 comments, around a quarter of which were opposed to the proposal. I am always fascinated with why people are hostile toward seemingly good things so I downloaded the comments and sorted and coded them.
Twenty-eight percent of the negative comments included gratuitous disparaging remarks about the article and its author. “Riiiiight. …whoever dreamed up this silly notion hasn’t got a clue about the realities of life.” “This drivel is always coming from some useless twit who sits on their backside…” “Yes, the article is nothing but pie-in-the-sky.” “Really?  It’s all a bit if a pipe dream isn’t it?” “Comrades , rejoice!  Tractor production will still be up 130%.” “Along with flying cars and pet unicorns for all, presumably.” “Following the columnist’s logic, why not a three day week? Or a two day week?” “better still just pay me full time but I don’t want to turn up at all.”

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Alexandria Ocasio-Cortez’s SOTU Sour Expression Provokes Republican Response

WASHINGTON (The Borowitz Report)

Andy Borowitz: “Representative Alexandria Ocasio-Cortez’s facial expression during the State of the Union address came under continued attack from Republicans on Thursday, with the former House Speaker John Boehner joining the chorus of disapproval.

‘When I saw her with that pained expression on her face, I couldn’t believe my eyes,’ Boehner said. ‘It was like nothing I had ever seen before in my life.’

The former Speaker said that Ocasio-Cortez broke his ‘No. 1 rule’ of reacting to a State of the Union speech: ‘No matter what the President is saying, be sure to look cheerful and upbeat at all times.’

‘I didn’t always agree with what President Obama had to say over the years, but I always kept a smile on my face,’ he said. ‘I think if the congresswoman went back and looked at video of me and my fellow-Republicans during the Obama speeches, she could learn a lot about maintaining a non-stop happy facial expression.’” Andy Borowitz, The New Yorker

Actually Representative Alexandria Ocasio-Cortez’s facial expressions reveals quite lucidly what many of us feel in listening to the garbage spewed forth by Trump and supported by Republicans with nary a word out of fear. AOC portrays what we feel . . . disgust.

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